Opinion
CV176074279S
07-05-2018
Lisa GILBERT v. ZIVTECH, LLC
UNPUBLISHED OPINION
Wilson, J.
I
STATEMENT OF THE CASE AND PROCEDURAL HISTORY
On October 17, 2017, the self-represented plaintiff, Lisa Gilbert, filed a one-count complaint against the defendant, ZivTech, LLC (ZivTech), sounding in vexatious litigation and alleging the following facts. ZivTech is a limited liability company organized in Delaware, with its principal place of business in Philadelphia, Pennsylvania. The plaintiff’s company, National Academic & Licensing Study Aids, LLC (NALSA), had previously entered into a written contract with ZivTech (contract). After a contract dispute arose, ZivTech filed a lawsuit in Pennsylvania, naming both NALSA and the plaintiff, individually. ZivTech knew that the plaintiff was not a party to the contract, but pursued tort and fraud claims against her without probable cause and for the purpose of harassment and intimidation. The Pennsylvania court ultimately dismissed the claims against the plaintiff, noting that the contract dispute was between ZivTech and NALSA, not the plaintiff individually. The plaintiff has now filed the present action for vexatious litigation.
On December 14, 2017, ZivTech filed a motion to dismiss and a supporting memorandum of law on the ground that it is a foreign company and the court does not have personal jurisdiction pursuant to General Statutes § 52-59b. The defendant also submitted an affidavit of Alexander Urevick-Acklesberg, co-founder and managing member of Zivtech, dated December 12, 2017. The plaintiff filed a memorandum of law in opposition to the motion to dismiss on January 8, 2018, and ZivTech filed a reply brief on January 26, 2018.
The defendant, ZivTech filed its appearance in this matter on November 17, 2017, and its motion to dismiss within thirty days thereof on December 14, 2017. Accordingly, ZivTech’s motion to dismiss was timely filed in accordance with Practice Book § 10-30(b).
This court scheduled a Standard Tallow evidentiary hearing on the issue of whether the court has personal jurisdiction over ZivTech pursuant to Connecticut’s long-arm statute, § 52-59b, and whether ZivTech had minimum contacts with this state in order to satisfy due process. ZivTech filed a pre-hearing memorandum of law on February 23, 2018, and the evidentiary hearing took place on March 19, 2018.
"When issues of fact are necessary to the determination of a court’s jurisdiction, due process requires that a trial-like hearing be held." Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56, 429 A.2d 503 (1983).
II
LEGAL STANDARD OF REVIEW
"[A] motion to dismiss ... properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). "A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) MacDermid, Inc. v. Leonetti, 310 Conn. 616, 626, 79 A.3d 60 (2013). "A court deciding a motion to dismiss must determine not the merits of the claim or even its legal sufficiency, but rather, whether the claim is one that the court has jurisdiction to hear and decide." (Internal quotation marks omitted.) Hinde v. Specialized Education of Connecticut, Inc., 147 Conn.App. 730, 740-41, 84 A.3d 895 (2014). "Because a lack of personal jurisdiction may be waived by the defendant, the rules of practice require the defendant to challenge that jurisdiction by a motion to dismiss." (Footnote omitted; internal quotation marks omitted.) Golodner v. Women’s Center of Southeastern Connecticut, Inc., 281 Conn. 819, 825, 917 A.2d 959 (2007). "If the defendant challenging the court’s personal jurisdiction is a foreign corporation or a nonresident individual, it is the plaintiff’s burden to prove the court’s jurisdiction." Cogswell v. American Transit Ins. Co., 282 Conn. 505, 515, 923 A.2d 638 (2007).
"[W]here a jurisdictional determination is dependent on the resolution of a critical factual dispute, it cannot be decided on a motion to dismiss in the absence of an evidentiary hearing to establish jurisdictional facts ... Likewise, if the question of jurisdiction is intertwined with the merits of the case, a court cannot resolve the jurisdictional question without a hearing to evaluate those merits ... An evidentiary hearing is necessary because a court cannot make a critical factual [jurisdictional] finding based on memoranda and documents submitted by the parties." (Citations omitted; footnotes omitted; internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 652-54, 974 A.2d 669 (2009). "When issues of fact are necessary to the determination of a court’s jurisdiction, due process requires that a trial-like hearing be held, in which an opportunity is provided to present evidence and to cross examine adverse witnesses." Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56, 459 A.2d 503 (1983).
III
DISCUSSION
ZivTech moves to dismiss on the ground that the court does not have personal jurisdiction pursuant to General Statutes § 52-59b. Specifically, ZivTech argues that it is an out-of-state company that does not transact business within Connecticut, so the court lacks jurisdiction pursuant to § 52-59b(a)(1). Further, ZivTech argues that it has not engaged in any tortious conduct in Connecticut and does not derive substantial revenue from Connecticut, so the court lacks jurisdiction pursuant to either § 52-59b(a)(2) or (3). The plaintiff objects, arguing that ZivTech derives substantial revenue from interstate and international commerce, as well as from Connecticut directly. The plaintiff argues that, by filing the vexatious lawsuit in Pennsylvania and serving a Connecticut resident, ZivTech committed a tortious act that caused harm to her in Connecticut. Accordingly, the plaintiff argues that the court has jurisdiction over ZivTech pursuant to either § 52-59b(a)(2) or (3)(B). ZivTech filed a reply brief, arguing that serving the plaintiff in Connecticut does not constitute a tortious act. ZivTech also argues that the plaintiff failed to produce any evidence to substantiate her claim that it derives substantial revenue from interstate or international commerce.
Oral argument on the motion to dismiss was scheduled for January 29, 2018. On that date, the court, Wilson, J., determined that issues of fact were necessary to the determination of the court’s jurisdiction, and therefore, a Standard Tallow Corp. evidentiary hearing was necessary to decide whether the court has personal jurisdiction over ZivTech pursuant to § 52-59b, and whether ZivTech has sufficient minimum contacts with this state. The defendant filed a pre-hearing memorandum of law on February 23, 2018, arguing that ZivTech’s actions do not meet the long-arm jurisdictional requirements set forth in § 52-59b(a)(3), because the alleged injury took place in Pennsylvania, not Connecticut. Further, ZivTech argues that it does not derive "substantial revenue" from interstate or international commerce as that term is defined in the case law. Finally, ZivTech argues that the court lacks personal jurisdiction because the cause of action arose from conduct that occurred in Pennsylvania, not Connecticut.
The evidentiary hearing took place on March 19, 2018. The plaintiff submitted the December 12, 2017 affidavit of ZivTech’s CEO, Alexander Urevick-Acklesberg (Ex. 1), as well as e-mail correspondence from various ZivTech employees to the plaintiff (Ex. 2). The plaintiff also called Urevick-Acklesberg to testify at the hearing. The defendant did not submit any exhibits into evidence.
In his affidavit, Urevick-Acklesberg avers that he is the co-founder and managing member of ZivTech, a Delaware limited liability company with its sole place of business in Philadelphia, Pennsylvania. He further avers that ZivTech does not own, lease or possess any real property in Connecticut; does not have employees, computers, or computer networks in Connecticut; does not derive any substantial revenue from Connecticut residents; and does not solicit business in Connecticut. Urevick-Acklesberg further avers that NALSA initiated the business relationship between NALSA and ZivTech, and that the contract is governed by Pennsylvania law, with venue for any disputes in Philadelphia, Pennsylvania; accordingly, ZivTech brought the subsequent contract litigation in Pennsylvania.
The e-mail exchanges submitted into evidence state that NALSA had initially approached ZivTech with a project inquiry submission in May 2015. Between May and June of 2015, the plaintiff, on behalf of NALSA, had corresponded with ZivTech employees regarding ZivTech’s proposal for the redevelopment of NALSA’s website. The e-mails state that ZivTech employees reached out to NALSA again in July, September, October, and December of 2015, as well as in January of 2016, to either follow up on the proposal or provide NALSA with additional information. NALSA responded to each e-mail, indicating that it remained interested in working with ZivTech or wanted to stay in touch. On January 26, 2016, NALSA wrote to ZivTech that it was "ready to move forward" with the project.
At the evidentiary hearing, Urevick-Acklesberg testified that ZivTech is an open source web development design and content strategy company. ZivTech helps develop websites for businesses, and also provides staff augmentation and training services. The company made $2,700,000 in revenue last year and $3,000,000 the year prior, and works with approximately forty clients per year. Of those forty clients, some are local to ZivTech in Philadelphia, Pennsylvania, and others are located around the country, including elsewhere in Pennsylvania, New Jersey, New York, Texas, Virginia, and California. Urevick-Acklesberg also testified that ZivTech has worked with international businesses.
Urevick-Acklesberg testified that ZivTech’s projects vary in terms of their work, duration, and price, ranging from a few thousand dollars per year to hundreds of thousands of dollars over the span of the business relationship. He testified that approximately half of ZivTech’s services are provided to entities outside of Pennsylvania, and approximately half of ZivTech’s revenue last year was derived from businesses outside of Pennsylvania. He testified that all of ZivTech’s work is done remotely from Pennsylvania and does not require access to clients’ computers. When asked if ZivTech would ever do work outside of Pennsylvania, Urevick-Acklesberg testified that they will do so sometimes, for select clients and under the advice of counsel, but not for a project of NALSA’s size.
Urevick-Acklesberg testified that ZivTech’s business is referral-based, and that the company does not solicit business. He was questioned about one of ZivTech’s periodic newsletters that was sent to NALSA and that included a contact form. He testified that this "maybe" qualified as soliciting business, but was also a tool for helping people.
Regarding ZivTech’s business in Connecticut, Urevick-Acklesberg testified that NALSA is the only Connecticut company with whom ZivTech has ever worked. Urevick-Acklesberg did visit Connecticut on one occasion, unrelated to ZivTech’s relationship with NALSA, to attend "Drupal Camp," a nonprofit event in support of the community that develops Drupal. Urevick-Acklesberg testified that attending and donating to Drupal camps could help his business, and he also testified that he supports the camps for charitable reasons.
"Zivtech is an active member of the open source software communities in which [it] work[s], most notably the Drupal community. [ZivTech] believe[s] community participation is essential to the expertise and professional development of [its] team. ZivTech advance[s] the open source platforms on which [it] work[s] by contributing [its] time, code, and knowledge. In return, [ZivTech] stay[s] on the cutting-edge of technology and [its] work benefits from consistent peer review." https://www.drupal.org/zivtech: see also, March 19, 2018 hearing transcript, testimony of Urevick-Acklesberg. Drupal is free open source software that can be used by individuals or groups of users to easily create and manage types of websites. Types of sites that Drupal can be used for include blogs, personal or corporate websites, portals, forums, e-commerce sites, intranets, resource directories and social networking sites. "ZivTech is a Philadelphia web design, web development, and digital strategy agency that specializes in Open Source Software. [Its] team tightly integrates its Drupal design and Drupal development work. [ZivTech] collaborates with its clients to deliver beautiful, intuitive, and highly scalable websites and web applications. Zivtech works with clients ranging from internet startups, to large non-profits, to Fortune 500 companies.
Regarding ZivTech’s business relationship with NALSA, Urevick-Acklesberg testified that NALSA had initially approached ZivTech with a request for a proposal, and that one of ZivTech’s employees had written three proposals for NALSA. Urevick-Acklesberg was questioned about the e-mail exchanges submitted into evidence, and stated that ZivTech was following up on the proposals sent to NALSA and that ZivTech was willing to work with a Connecticut company in Pennsylvania. When asked whether a particular e-mail, sent from ZivTech’s employee Jody Hamilton, constituted ZivTech trying to get business from a Connecticut company, Urevick-Acklesberg testified "sure." See Pl.’s Ex. 1 p. 83. ZivTech received $12,000 from NALSA, and claims that NALSA still owes ZivTech $40,000. Urevick-Acklesberg could not say with certainty, but thought the overall project size for NALSA was going to be $100,000.
A
Long-arm Jurisdiction
"[T]he court must undertake a two-part inquiry to determine the propriety of its exercising such jurisdiction over the [foreign] defendant. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Internal quotation marks omitted.) Kenny v. Banks, 289 Conn. 529, 533, 958 A.2d 750 (2008). "Those standards ... require that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." (Citation omitted; internal quotation marks omitted.) Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 51-52.
"[Section] 52-59b(a) is the long-arm statute applicable to foreign LLCs ..." Matthews v. SBA, Inc., 149 Conn.App. 513, 549, 89 A.3d 938, cert. denied, 312 Conn. 917, 94 A.3d 642 (2014). Section 52-59b(a) provides: "As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual, foreign partnership or foreign voluntary association, or over the executor or administrator of such nonresident individual, foreign partnership or foreign voluntary association, who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; (3) commits a tortious act outside the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if such person or agent (A) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (B) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; (4) owns, uses or possesses any real property situated within the state; or (5) uses a computer, as defined in subdivision (1) of subsection (a) of section 53-451, or a computer network, as defined in subdivision (3) of subsection (a) of said section, located within the state."
The plaintiff has neither alleged nor presented any evidence that the defendant either owns, uses or possesses any real property in Connecticut pursuant to § 52-59b(a)(4), or uses a computer or a computer network located within the state pursuant to § 52-59b(a)(5). Rather, the parties dispute whether the court may properly exercise jurisdiction over the defendant pursuant to subsections (1), (2), and (3) of the long-arm statute. Each of these sections will be addressed in turn.
1
§ 52-59b(a)(1)
General Statutes § 52-59b(a)(1) "vests the court with jurisdiction over a nonresident individual as to a cause of action arising from any business transacted by that individual in this state ..." Ryan v. Cerullo, 282 Conn. 109, 115, 918 A.2d 867 (2007). "[A]lthough the term ‘[t]ransacts any business’ is not defined by statute, we previously have construed the term to embrace a single purposeful business transaction." (Internal quotation marks omitted.) Id., 119. "Moreover, a nonresident individual who has not entered this state physically nevertheless may be subject to jurisdiction in this state under § 52-59b(a)(1) if that individual has ‘invoked the benefits and protection of Connecticut’s laws’ by virtue of his or her ‘purposeful Connecticut-related activity ...’ Zartolas v. Nisenfeld, [ 184 Conn. 471, 475, 440 A.2d 179 (1981) ]; see also Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) (determination of whether exercise of personal jurisdiction satisfies due process ‘will vary with the quality and nature of the defendant’s activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum [s]tate, thus invoking the benefits and protections of its laws’)." Ryan v. Cerullo, supra, 120; see also Walshon v. Ballon Stoll Bader & Nadler, P.C., 121 Conn.App. 366, 372, 996 A.2d 1195 (2010) ("[t]here must be some definitive act taken by the defendant that evinces a purposeful availment of the privileges of conducting the subject activity within the- forum state and that, subsequently, invokes the benefits and protections of its laws"); Pollock v. 69-75 Daggett Street, Superior Court, judicial district of New Haven, Docket No. CV-15-6054157-S (December 1, 2015, Wilson, J.) (61 Conn.L.Rptr. 426, 428) ("[a] purposeful business transaction is one in which the defendant has engaged in some form of affirmative conduct allowing or promoting the transaction of business within the forum state" [internal quotation marks omitted] ).
Ryan v. Cerullo, supra, 282 Conn. 111, involved allegations that the defendants, Cerullo, a certified public accountant, and Cerullo and Company CPA, P.C., an accounting firm, had negligently prepared the plaintiff’s income tax returns. The plaintiff alleged that "the defendants had derived revenue from their preparation of his Connecticut income tax returns, and ... knew that the plaintiff resided in Connecticut and, therefore, should have anticipated that their actions on his behalf would have consequences in Connecticut." Id., 116. Cerullo appeared at a hearing on the defendants’ motion to dismiss, and testified that "not more than 1 percent of Cerullo & Company’s annual income is derived from accounting services ‘having [some] connection with the state of Connecticut.’ " Id., 116. The trial court dismissed the action, having found "no evidence that any of the contacts at issue occurred in Connecticut. There is no evidence that the defendants solicited business in Connecticut. There is no evidence that they derived anything but minimal income from Connecticut residents and businesses." Id., 116-17. "[Because] their contacts with this state have been minimal, this court cannot say that the defendants should have anticipated litigation in this forum." Id., 116.
The appellate court agreed. "[T]he defendants derived only minimal income from Connecticut residents, did not solicit business in Connecticut and did not promote themselves as a national accounting firm. With respect to the professional accounting services that the plaintiff retained the defendants to provide, the defendants performed those services exclusively in New York, met with the plaintiff exclusively in New York and corresponded exclusively with New York tax officials. Moreover, the plaintiff had retained the defendants to prepare federal and state tax returns on income earned in New York. Although it is true, of course, that the plaintiff resides in Connecticut and that Cerullo prepared the plaintiff’s Connecticut income tax returns, we agree with the trial court that those facts alone are insufficient to warrant a determination that the professional services rendered by Cerullo constituted the transacting of business in this state within the meaning of § 52-59b(a)(1)." Id., 120. See also Rosenblit v. Danaher, 206 Conn. 125, 140, 537 A.2d 145 (1988) (holding, in action against former counsel, one business meeting in Connecticut did not confer jurisdiction when plaintiffs "went to Massachusetts and ... hired an attorney, who resided and practiced law in Massachusetts"); Cofrancesco Chiropractic & Healing Arts v. Maciejewski, Superior Court, judicial district of New Haven, Docket No. CV-13-6042888-S (November 3, 2014, Wilson, J.) (finding long-arm jurisdiction where foreign defendant had, inter alia, engaged in business with other Connecticut residents besides plaintiff, and remotely accessed plaintiff’s computer to provide services).
Further, as to the individual defendant Cerullo, the court also noted that the plaintiff could not meet the second requirement of § 52-59b(a)(1) "that his cause of action against Cerullo arose from Cerullo’s business activity in this state." Ryan v. Cerullo, supra, 282 Conn. 121-22. The court held that, although there was some interrelationship between the plaintiff’s Connecticut income tax returns and his New York income tax returns, the plaintiff’s claim related "solely to the allegedly negligent preparation of his New York income tax returns ..." Id., 123. Accordingly, the court found that the plaintiff failed to meet his burden that the court could exercise jurisdiction over Cerullo pursuant to § 52-59b(a)(1).
In the present case, the defendant does not dispute that the plaintiff’s cause of action arises from the defendant’s business activities with the plaintiff’s company. The plaintiff has plainly alleged that the vexatious litigation suit stems from a breakdown in the business relationship between ZivTech and NALSA, and ZivTech’s subsequent attempt to hold the plaintiff individually liable in tort and fraud. ZivTech does, however, dispute the plaintiff’s allegation that it has transacted business in the state. Urevick-Acklesberg testified that NALSA is the only Connecticut-based company with whom ZivTech has done business, and that NALSA paid ZivTech $12,000 in a year when ZivTech made $3,000,000 in revenue. As in Ryan v. Cerullo, this amounts to not more than 1 percent of ZivTech’s annual income having some connection with the state of Connecticut. Further, Urevick-Acklesberg testified that the plaintiff traveled to Pennsylvania to meet with ZivTech employees in person, and that ZivTech exclusively performed services in Pennsylvania. Following both Ryan v. Cerullo and Rosenblit v. Danaher, Urevick-Acklesberg’s one-time visit to Connecticut to attend Drupal Camp, an event unrelated to ZivTech’s dealings with the plaintiff, does not negate that the majority of the business relationship between ZivTech and NALSA was based in Pennsylvania.
Finally, even considering Urevick-Acklesberg’s testimony regarding ZivTech’s circulation of an electronic newsletter and sending follow up e-mails to NALSA, such actions do not amount to transacting business in the state. In Lane v. Hopfeld, 160 Conn. 53, 55-56, 273 A.2d 721, (1970), our Supreme Court considered whether an out-of-state ladder manufacturer’s advertisement in a trade journal, and subsequent sale to a Connecticut resident, amounted to the transaction of business within the state. "[T]he plaintiff’s employer saw an advertisement of the ladder made by the defendant in some trade journal and wrote for a brochure and a price list. A brochure and a price list were mailed to him by the defendant and, on the basis of the information in them, he purchased a ladder from the defendant f.o.b. San Rafael, California, and paid for it by a check mailed from Connecticut." Id., 56. The court noted that "[t]he words ‘transacts business’ as used in § 52-59a are not defined, but the trial court concluded that they have essentially the same meaning as in § § 33-396 and 33-397, which deal with service on foreign corporations. Section 33-397(b)(5) provides that soliciting or procuring orders by mail where the orders require acceptance outside the state before becoming binding contracts does not constitute transacting business for the purposes of § 33-396 ..." Id., 57. The court ultimately concluded that, "[u]nder accepted contract principles, the defendant’s advertisement, brochure and price list were a solicitation for an offer and not an offer, the plaintiff’s employer’s order for a ladder was an offer to the defendant, the offer was accepted when the defendant agreed to ship or shipped the ladder, and there was no binding contract until the offer was accepted ... Consequently, the contract of sale was made in California and became binding there." (Citation omitted.) Id., 57-58.
This court notes that "[General Statutes] § 52-59a was the law applicable to the service which was attempted in [Lane v. Hopfeld] at the time the plaintiff’s cause of action matured, at the time suit was brought, and at the time the judgment appealed from was rendered. The section was repealed by 1969 Public Act No. 744, now General Statutes § 52-59b, which became effective on October 1, 1969, and supplanted § 52-59a." Lane v. Hopfeld, supra, 160 Conn. 56. Section 52-59a provided in relevant part: ‘Except as otherwise provided by law, any nonresident individual or foreign partnership which transacts business in this state, personally or by an agent, salesman, employee, officer or another, shall be deemed to have appointed the secretary of the state as its attorney and to have agreed that any process in any civil action brought against such nonresident individual or foreign partnership may be served upon said secretary and shall have the same validity as if served upon such nonresident individual or foreign partnership personally.’ " Lane v. Hopfeld, supra, 54 n.1. The current language in § 52-59b(a)(1) requiring the transaction of business within Connecticut remains substantively the same; accordingly, the analysis of "transacts business in this state" in Lane v. Hopfeld is applicable to this court’s analysis of § 52-59b(a)(1) in the present case.
Further, "[t]elephone calls and written communications ... generally are held not to provide a sufficient basis for personal jurisdiction under the long-arm statute ..." (Internal quotation marks omitted.) Green v. Simmons, 100 Conn.App. 600, 605, 919 A.2d 482 (2007). To provide a sufficient basis for personal jurisdiction, such communication "must be shown to have been used by the defendant to actively participate in business transactions in [the forum state] ... [T]elephone and mail contacts are jurisdictionally insufficient unless the defendant projected himself by those means into [the forum state] in such a manner that he purposefully availed himself ... of the benefits and protections of its laws." (Citation omitted; internal quotation marks omitted.) Id. Compare Green v. Simmons, supra, 100 Conn.App. 607-08 ("the defendants’ mailing of two unanswered letters to Connecticut constituted even less contact with this state than the attorney’s presence at a business meeting in Connecticut in Rosenblit, in which the court found that the requirements of § 52-59b(a)(1) were not satisfied"), and Calderoni v. Gissas, Superior Court, judicial district of New Britain, Docket No. CV-15-6030914-S (April 26, 2016, Young, J.) ("[T]he negotiation of contracts, standing alone, does not constitute transacting business in Connecticut ... Similarly, the transmission of communications between an out-of-state defendant and a plaintiff within the jurisdiction does not, by itself, constitute the transaction of business in a forum state" [internal quotation marks omitted] ), with Hart, Nininger & Campbell Associates, Inc. v. Rogers, 16 Conn.App. 619, 625, 528 A.2d 759 (1988) (finding personal jurisdiction pursuant to § 52-59b(a)(1) where "each defendant came to Connecticut to negotiate and sign his individual employment contract. Thereafter, the defendants came to Connecticut to attend quarterly business meetings pertaining to their employment with [the plaintiff]"), and Kent Frost, LLC v. Schuman, Superior Court, judicial district of New London, Docket No. CV- 17-6031485-S (March 9, 2018, Frechette, J.) (66 Conn.L.Rptr. 140, 141) ("[The plaintiff] avers that he and the defendant exchanged approximately seventy-five emails as well as dozens of telephone calls and text messages. Although those communications alone are insufficient to confer jurisdiction over the defendant ... those communications, coupled with the evidence that the defendant purposefully availed himself to the plaintiff’s business, consciously sought out the plaintiff’s services, entered a contract with the plaintiff, and was fully aware that the work would be performed in Connecticut, are sufficient to confer personal jurisdiction over the defendant under § 52-59b(a)(1)" [citation omitted; emphasis added] ).
In the present case, the plaintiff’s evidence demonstrates that NALSA had e-mailed a project inquiry submission to ZivTech, thereby initiating contact with the defendant. See Pl.’s Ex. 2 pp. 41-42. Urevick-Acklesberg also testified to the same. It is not readily apparent, on the basis of the evidence submitted, that ZivTech’s subsequent proposal and follow up e-mails to NALSA show that ZivTech was actively participating in business transactions within the state, nor do they demonstrate that ZivTech was purposefully availing itself of the benefits and protections of Connecticut laws. Urevick-Acklesberg testified that NALSA ultimately met with ZivTech in Pennsylvania; that the contract between ZivTech and NALSA was entered into and became binding in Pennsylvania, governed by Pennsylvania law; and that ZivTech would perform the work in Pennsylvania. Considering these factors, the e-mail and phone call communications from ZivTech do not amount to the transaction of business in the state. Accordingly, the plaintiff has not met her burden in showing that the defendant transacted business in Connecticut, and as a result, the court lacks personal jurisdiction over the defendant pursuant to § 52-59b(a)(1).
2
§ 52-59b(a)(2)
Pursuant to § 52-59b(a)(2) a court may exercise jurisdiction over a defendant who commits a tortious act within the state, except as to a cause of action for defamation of character. Connecticut recognizes both common-law and statutory causes of action for vexatious litigation. "A vexatious suit is a type of malicious prosecution action, differing principally in that it is based upon a prior civil action ... To establish either cause of action, it is necessary to prove want of probable cause, malice and a termination of suit in the plaintiff’s favor." Falls Church Group, Ltd. v. Tyler, Cooper & Alcorn, LLP, 281 Conn. 84, 94, 912 A.2d 1019 (2007). "A statutory action for vexatious litigation under General Statutes § 52-568 ... differs from a common-law action only in that a finding of malice is not an essential element, but will serve as a basis for higher damages." Id. The issue in the present case is whether an out of state defendant, that has served a Connecticut resident with an allegedly vexatious suit and haled her into an out of state court, has committed "a tortious act within the state" of Connecticut pursuant to § 52-59b(a)(2). The court concludes that the alleged tort took place, if at all, in Pennsylvania.
In Schaefer v. O.K Tool Co., Inc., 110 Conn. 528, 533, 148 A. 330 (1930), the plaintiff had instituted two actions against the defendant, one in the state of Connecticut and another in New York. The defendant brought a counterclaim in Connecticut, alleging, inter alia, that the New York action was brought "solely to harass the defendant and was without justification and vexatious." Id. In deciding that the counterclaim sounded in vexatious suit or malicious prosecution rather than abuse of process, the court noted that "[t]he defendant’s complaint is of the issue of the process, not the abuse of it. The only action of the plaintiff which is complained of, is that he instituted a suit by summons and complaint in the State of New York ..." (Emphasis added.) Id., 534. Although the case is not clear as to where the defendant resided or where he was served, the court concluded that, because the suit had been initiated in New York, "the tort of the plaintiff, if any, was committed in the State of New York ... and, if the defendant was wronged, it is because that conduct of the plaintiff constituted the tort of malicious prosecution ..." Id.
Here, the plaintiff’s complaint similarly sounds in vexatious litigation and concerns the issue of the process. The crux of the plaintiff’s argument is that ZivTech commenced an action in Pennsylvania against her individually, and without legal justification. Although the plaintiff was served in Connecticut, following Schaefer, the tort was committed in Pennsylvania where the allegedly vexatious action was instituted. Accordingly, the plaintiff has not met her burden that the court can exercise personal jurisdiction over ZivTech pursuant to § 52-59b(a)(2).
3
§ 52-59b(a)(3)
Although Schaefer supports the conclusion that the alleged tort occurred in Pennsylvania, it does not resolve the issue of whether the tort caused injury to the plaintiff in Connecticut. To satisfy § 52-59b(a)(3)(B), it is the plaintiff’s burden to show that the defendant’s tortious act caused injury to person or property within the state, that the defendant expects or should reasonably expect the act to have consequences in the state, and that the defendant derives substantial revenue from interstate or international commerce. The plaintiff has not met her burden to establish jurisdiction under this section.
Preliminarily, the defendant cites to Robb v. Robb, 620 F.Supp.2d 282, 286 (D.Conn. 2009), in support of its argument that the plaintiff’s injury, if any, occurred in Pennsylvania where the suit was filed. In Robb, the plaintiffs alleged that the defendant had sexually abused them for years while the parties lived in New York. Id., 283. Although the plaintiffs did not dispute that the abuse occurred in New York, each plaintiff alleged that she "experienced a transformative ‘realization,’ while living in Connecticut, that the Defendant’s actions ‘were abusive and harmful to her. Id., 284. The plaintiffs thus alleged that their injuries occurred in Connecticut, and sought to hold the defendant liable in Connecticut. See id. Applying the "situs-of-injury test," the court granted the defendant’s motion to dismiss for lack of personal jurisdiction pursuant to § 52-59b(a)(3). Id., 286-87. "[T]he situs of the injury is the location of the original event which caused the injury, not the location where the resultant damages are felt by the plaintiff." Id., 286. Thus, the court concluded that, "[w]hile the events triggering Plaintiffs’ understanding of their injuries took place in Connecticut, the conduct that actually caused their emotional and psychological injuries took place in New York. The fact that Plaintiffs’ injuries were not manifested or understood until Plaintiffs were in Connecticut, where they were actuated by benign events unrelated to Defendant’s conduct, is insufficient to confer personal jurisdiction over Defendant under § 52-59b(a)(3)." (Emphasis in original.) Id., 287.
The court and parties "[focused] their analysis of § 52-59b(a)(3) on case law from New York interpreting that state’s analogous long-arm statute, N.Y. C.P.L.R. § 302(a)(3), whose interpretations Connecticut courts find persuasive because the New York provision formed the basis for, and is identical in relevant part to, § 52-59b(a)(3) ... [C]ourts determining whether there is injury in New York sufficient to warrant § 302(a)(3) jurisdiction must generally apply a situs-of-injury test, which asks them to locate the original event which caused the injury." (Citation omitted; footnote omitted; internal quotation marks omitted.) Id., 286. Thus, the court in Robb applied the same situs-of-injury test when deciding the motion to dismiss.
Similarly, in Ryan v. Cerullo, the court "[noted] that, although we need not decide the issue, it is uncertain whether the plaintiff can satisfy the requirement of § 52-59b(a)(3)(B) that Cerullo’s alleged malpractice caused injury to him in this state. Indeed, the plaintiff received a tax credit in this state as a result of Cerullo’s allegedly negligent preparation of his New York income tax returns. From all that appears, the situs of the plaintiff’s injury is New York, where all of the critical events occurred." (Emphasis in original.) Id., 124 n.15. The court cited to Bross Utilities Service Corp. v. Aboubshait, 489 F.Supp. 1366, 1374 (D.Conn.), which construed § 52-59b(a)(3) and held that, "in the context of commercial torts, the place of injury is generally the place where the critical events associated with the dispute took place." (Internal quotation marks omitted.) Ryan v. Cerullo, supra, 282 Conn. 124 n.15; see also Banning v. Re/Max at the Lake, Superior Court, judicial district of New Haven, Docket No. CV-13-6036005-S (December 30, 2013, Fischer, J.) ("[The] critical events test [was created] to determine the situs of the injury resulting from the tortious act [under § 52-59b(a)(3) ] ... In evaluating the critical events for the purposes of jurisdiction, it has been held that the plaintiff’s residence or domicile within a state, in and of itself, is not a sufficient predicate for the exercise of jurisdiction in that state. The determinative factor for jurisdiction is evidence of direct economic injury to the plaintiff within the state." [Citation omitted; internal quotation marks omitted.] ).
The facts in the present case are distinguishable from Robb and its application of the situs-of-injury test. Here, the plaintiff did not merely "realize" the latent effects of the defendant’s tort in Connecticut, but alleges that she was affirmatively harmed here. The plaintiff alleges that the defendant knew that she was a Connecticut resident and not amenable to jurisdiction in Pennsylvania as she was not a party to the contract, but proceeded to involve her in the Pennsylvania litigation for the purpose of harassing her in Connecticut. She further alleges that she spent substantial time defending herself in the Pennsylvania suit, which in turn caused substantial disruption to her activities as a NALSA member. These allegations are quite different from the facts in Robb, where the plaintiffs recognized years later that the defendant’s actions were abusive and harmful and, where the injuries were actuated by benign events in Connecticut unrelated to the defendant’s conduct. Further, unlike Ryan v. Cerullo, the tort of vexatious litigation is not commercial in nature, so the "critical events" test does not directly apply. Nevertheless, the plaintiff has not met her burden of demonstrating the other elements set forth in § 52-59b(a)(3), namely, that the defendant derived "substantial revenue ... from goods used or consumed or services rendered, in the state" pursuant to subsection (A), or "from interstate or international commerce" pursuant to subsection (B).
The court notes that neither party has clearly argued for or against personal jurisdiction pursuant to § 52-59b(a)(3)(A), which requires the plaintiff to show that the defendant has "[committed] a tortious act outside the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if such person or agent (A) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state." Although the plaintiff did elicit testimony from Urevick-Acklesberg that e-mail correspondence from a ZivTech employee constituted ZivTech’s attempt to get business from a Connecticut company, as stated earlier in this decision, such action does not amount to transacting business pursuant to § 52-59b(a)(1), and is likewise not enough to establish that the defendant "regularly does or solicits business, or engages in any other persistent course of conduct" in Connecticut. In Matto v. Dermatopathology Associates of New York, 55 Conn.App. 592, 593, 739 A.2d 1284 (1999), the plaintiff alleged that an out-of-state defendant had negligently interpreted the plaintiff’s skin pathology biopsies. In support of the jurisdictional issue, the plaintiff introduced evidence that he had paid for the defendant’s services, and that the defendant had received tissue samples from other Connecticut physicians. Id., 600-01. The Appellate Court, however, held that the court lacked jurisdiction pursuant to either § 52-59b(a)(3)(A) or (B) on the basis of the defendant’s affidavits, which stated, inter alia, that the defendant did not have offices in Connecticut; did not have any employees who maintained a business office in Connecticut; did not advertise in Connecticut; did not suggest, recommend or request that the plaintiff’s tissue samples be referred to it; did not solicit business from Connecticut physicians; and did not meet with the plaintiff or travel to Connecticut to discuss the plaintiff’s treatment. See id., 601. A number of these factors are applicable to the present case, including that ZivTech does not maintain offices in Connecticut, does not advertise in Connecticut, and has not traveled to Connecticut to discuss the plaintiff’s project. Further, and as will be discussed, the plaintiff has not met her burden in demonstrating that the defendant derives substantial revenue, either from Connecticut or from interstate or international commerce having a commercial impact on Connecticut.
Our Supreme Court has interpreted "derives substantial revenue from interstate or international commerce," as used in § 52-59b(a)(3)(B), to mean "enough revenue to indicate a commercial impact in the forum, such that a defendant fairly could have expected to be haled into court there." (Internal quotation marks omitted.) Ryan v. Cerullo, supra, 282 Conn. 125. "New York courts have concluded, in interpreting their identically worded long-arm statute, that the ‘substantial revenue’ requirement is designed to narrow the long-arm reach to preclude the exercise of jurisdiction over nondomiciliaries who might cause direct, foreseeable injury within the [s]tate but whose business operations are of a local character ..." (Internal quotation marks omitted.) Id., 124-25. "Because of the indefinite nature of the ‘substantial revenue’ requirement, the determination of whether, that jurisdictional threshold has been met in any particular case necessarily will require a careful review of the relevant facts and frequently will entail an evaluation of both the total amount of revenue involved and the percentage of annual income that that revenue represents. Compare Founding Church of Scientology of Washington, D.C. v. Verlag, 536 F.2d 429, 432-33 (D.C. Cir. 1976) (1 percent of magazine’s gross revenue, or $26,000, constituted ‘substantial revenue’ on basis of low unit price of magazines), with Murdock v. Arenson International USA, Inc., 157 App.Div.2d 110, 113-14, 554 N.Y.S.2d 887 (1990) (0.05 percent of corporate defendant’s total sales, totaling $9,000, did not satisfy ‘substantial revenue’ requirement)." Ryan v. Cerullo, supra, 125.
The court in Ryan v. Cerullo, in addition to discussing § 52-59b(a)(1), also declined to confer jurisdiction pursuant to § 52-59b(a)(3)(B). "Even if we assume, arguendo, that the plaintiff’s allegations of professional negligence against Cerullo satisfy the first four elements of § 52-59b(a)(3)(B), the plaintiff has failed to meet the final statutory requirement, namely, that Cerullo derives substantial revenue from interstate commerce. Id., 123-24. In concluding that the defendants did not derive substantial revenue from Connecticut, the court again referred to the fact that Cerullo & Company earned "up to 1 percent of its annual income from accounting services bearing some relationship to the state of Connecticut." Id., 124. The court also noted a lack of evidence in the record as to how much that percentage represents in actual revenue, or how much the plaintiff paid the defendants for their accounting services. Id., 125-26. Finally, the court concluded that the plaintiff "failed to demonstrate that the defendants derive any other income from interstate commerce." Id., 126. Accordingly, the court held that the plaintiff failed to meet his burden to present evidence satisfying the substantial revenue requirement of § 52-59b(a)(3)(B). Id. See also Matto v. Dermatopathology Associates of New York, supra, 55 Conn.App. 600-01 (holding no personal jurisdiction pursuant to § 52-59b(a)(3)(A) or (B) because, although Connecticut plaintiff paid for out-of-state defendant’s services and defendant had received tissue samples from other Connecticut physicians, out-of-state defendant, inter alia, did not have offices in Connecticut, did not advertise in Connecticut, and did not meet with plaintiff in Connecticut).
In the present case, although the plaintiff has presented evidence regarding the total amount of revenue ZivTech has received from NALSA and from interstate commerce, these figures do not support the conclusion that ZivTech derived substantial revenue from interstate or international commerce. Although Urevick-Acklesberg testified that up to 50% of the company’s annual revenue comes from businesses outside the state of Pennsylvania, it is the plaintiff’s burden to show that ZivTech’s interstate commerce had a commercial impact in Connecticut, such that it fairly could have expected to be haled into court here. Following Cerullo and the cases cited therein, the plaintiff’s evidence that ZivTech received a single payment of $12,000 from a Connecticut company, which was less than one percent of ZivTech’s annual revenue in that year, is not enough to establish a commercial impact in the state, and does not permit this court to exercise long-arm jurisdiction over the defendant.
B
Minimum Contacts
If the long-arm requirements are met, the court’s "second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Internal quotation marks omitted.) Kenny v. Banks, supra, 289 Conn. 533. "[A] determination of whether sufficient minimum contacts with Connecticut exist is a fact question." Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 56. It is "incumbent on the plaintiff to prove the facts establishing the requisite minimum contacts." Id., 52-53.
"The twin touchstones of due process analysis under the minimal contacts doctrine are foreseeability and fairness. [T]he foreseeability that is critical to due process analysis ... is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." (Internal quotation marks omitted.) Hart, Nininger & Campbell Associates, Inc. v. Rogers, supra, 16 Conn.App. 625-26.
"As articulated in the seminal case of International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the constitutional due process standard requires that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice ... In other words, [t]he [d]ue [p]rocess [c]lause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations ... By requiring that individuals have fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign ... the [d]ue [p]rocess [c]lause gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit ... The due process test for personal jurisdiction has two related components: the ‘minimum contacts’ inquiry and the ‘reasonableness’ inquiry. The court must first determine whether the defendant has sufficient contacts with the forum state to justify the court’s exercise of personal jurisdiction." (Citation omitted; internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., supra, 282 Conn. 523-24.
"Due process demands more, however, than the existence of minimum contacts between the defendant and the forum state. Once minimum contacts have been established, [t]he second stage of the due process inquiry asks whether the assertion of personal jurisdiction comports with traditional notions of fair play and substantial justice- that is, whether it is reasonable under the circumstances of the particular case ... [Therefore] [w]hile the exercise of jurisdiction is favored where the plaintiff has made a threshold showing of minimum contacts at the first stage of the inquiry, it may be defeated where the defendant presents a compelling case that the presence of some other considerations would render jurisdiction unreasonable." (Citation omitted; internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., supra, 282 Conn. 525.
Because the defendant did not transact business in Connecticut, did not commit a tort in the state of Connecticut, and did not derive substantial revenue from Connecticut or from interstate or international commerce with a commercial impact in Connecticut, the defendant could not have reasonably anticipated being haled into court here. Accordingly, it would not be reasonable under the facts of this case to exercise jurisdiction over the defendant. See Cogswell v. American Transit Ins. Co., supra, 282 Conn. 534-35 ("because the plaintiff has failed to prove that the defendant has the requisite minimum contacts with Connecticut, we need not consider whether the exercise of personal jurisdiction would be reasonable"); Matto v. Dermatopathology Associates of New York, supra, 55 Conn.App. 601 ("[h]aving concluded that the statutory requirements were not satisfied, we need not decide whether the exercise of jurisdiction over the defendant would violate constitutional principles of due process").
Accordingly, for the foregoing reasons, the plaintiff has not met her burden that the court can exercise personal jurisdiction over the defendant.
CONCLUSION
The plaintiff has not met her burden in demonstrating that the court may exercise personal jurisdiction over the defendant pursuant to § § 52-59b(a)(1), (2), or (3). Accordingly, the defendant’s motion to dismiss for lack of personal jurisdiction is granted.